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| Nova Scotia Business Incorporated Financial Assistance Regulations |
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Nova Scotia Business Incorporated Act
S.N.S. 2000, c. 30
O.I.C. 2001-525 (November 6, 2001), N.S. Reg. 133/2001
Citation
1 These regulations may be cited as the Nova Scotia Business Incorporated Financial Assistance Regulations.
Interpretation
2 (1) In these regulations,
(a) "Act" means the Nova Scotia Business Incorporated Act;
(b) "annual portfolio lending cap" means the maximum amount of funds available to the Corporation in each fiscal year for the provision of loan[s] and loan guarantees to applicants for financial assistance;
(c) "annual sector lending limits" means the maximum amount of funds available in each fiscal year to each eligible sector of the economy of the Province as determined by the Corporation in accordance with Section 3;
(d) "affiliate" means an affiliate within the meaning of subsection (2);
(e) "application" means an application to the Corporation for financial assistance in accordance with the Act and these regulations;
(f) "Board" means the Board of Directors of the Corporation;
(g) "Corporation" means Nova Scotia Business Incorporated;
(h) "Department" means the Department of Economic Development;
(i) "financial assistance" includes assistance by way of loan, loan guarantee, payroll rebate, the purchase or guarantee of bonds, debentures, notes or other debt obligations and the purchase or acquisition of any common or preferred shares or other equity securities including, but not limited to, venture capital investments;
(j) "individual loan/loan guarantee limits" means the maximum dollar value or the maximum percentage of the total loan portfolio that the Board determines appropriate for any individual loan or loan guarantee;
(k) "interest rate policy" means the Corporation’s policy, as established by the Board, with respect to interest rates applicable to financial assistance;
(l) "Minister" means the Minister of Economic Development;
(m) "Nova Scotia Fund" means the Nova Scotia Business Fund;
(n) "payroll rebate program" means a program funded through strategic investment funds, by which a portion of the taxes collected from a business, by the Province, are returned based on a percentage of the total payroll of the business;
(o) "strategic investment funds" means funds, other than the Nova Scotia Fund, maintained by the Corporation to fund the provision of certain forms of financial assistance including the payroll rebate program.
(2) For the purposes of these regulations,
(a) one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person;
(b) if two bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other;
(c) a body corporate is controlled by a person or by two or more bodies corporate if
(i) securities of the body corporate to which are attached more than fifty per cent of the votes that may be cast to elect directors of the body corporate are held, other than by way of security only, by or for the benefit of that person or by or for the benefit of those bodies corporate, and
(ii) the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate;
(d) a body corporate is the holding body corporate of another if that other body corporate is its subsidiary; and
(e) a body corporate is a subsidiary of another body corporate if
(i) it is controlled by
(A) that other body corporate,
(B) that other body corporate and one or more bodies corporate each of which is controlled by that other body corporate, or
(C) two or more bodies corporate each of which is controlled by that other body corporate, or
(ii) it is a subsidiary of a body corporate that is a subsidiary of that other body corporate.
(3) For the purposes of the Act and these regulations, the term "strategic directions established by the Department" means those directions that may be established to
(a) improve the business climate;
(b) put in place and maintain the strategic infrastructure to support economic growth;
(c) promote innovation by adopting and commercializing new products and technologies;
(d) develop a labour force with the skills and education to take advantage of our new opportunities;
(e) attract more investments from both local and external sources;
(f) aggressively promote exports from the Province; and
(g) strengthen regional capacity to advance economic development,
in order to build vital economic sectors based on ocean resources, land resources, agriculture, tourism and culture and in those sectors approved by the Minister or that may be approved by the Minister as providing growth opportunities.
Determination of annual sector lending limits
3 In determining the annual sector lending limits, the Corporation shall consider the amount appropriate to lend to any single industry sector or within any geographic region in the Province.
Annual business plan
4 In preparing an annual detailed business plan for submission to the Minister pursuant to Section 31 of the Act, the Corporation shall
(a) determine and include the annual portfolio lending cap, annual sector lending limits, individual loan/loan guarantee limits and interest rate policy;
(b) include the maximum percentage of the total amount of the Nova Scotia Fund available for financial assistance by way of equity investments and by way of working capital loans in consultation with the Minister of Finance;
(c) include policies and guidelines governing the payroll rebate program and any other program of assistance funded through strategic investment funds; and
(d) address such other matters as the Minister may request.
Funding for financial assistance
5 (1) Any financial assistance approved by the Board other than financial assistance provided from strategic investment funds, shall be expended from or be a charge on the Nova Scotia Fund.
(2) Any financial assistance provided from strategic investment funds shall be an expenditure in accordance with the Corporation’s approved budget and shall be provided in accordance with policies and procedures set out in the Corporation’s business plan.
Applications for financial assistance
6 (1) The Board may, subject to the provisions of the Act and these regulations, approve, reject, defer or otherwise deal with an application for financial assistance in such manner as it considers appropriate, having regard to the object of the Corporation set out in Section 15 of the Act, namely to promote economic development in the Province through
(a) business development, retention and expansion;
(b) the establishment of new businesses in the Province; and
(c) trade development and expansion
in accordance with strategic directions established by the Department and the strategic plan of the Corporation.
(2) An application to the Corporation for financial assistance shall be in writing and shall be in such form and provide such information as the Board may require.
(3) Every application shall be reviewed by the staff of the Corporation prior to being considered by the Board.
(4) The Board, in considering an application for financial assistance, shall follow the strategic directions established by the Department, and shall consider and be guided by the strategic plan of the Corporation, individual loan/loan guarantee limits, sector lending limits, annual portfolio lending cap and the interest rate policy and such other matters as the Board may consider appropriate.
Ineligibility for financial assistance
7 (1) Financial assistance shall not be provided by the Corporation for any commercial business or other activity that is carried out by a private, exclusive or charitable club or organization.
(2) Financial assistance shall not be provided by the Corporation for any business activity that is eligible for financial assistance from the Nova Scotia Fisheries and Aquaculture Loan Board, the Nova Scotia Farm Loan Board, the Nova Scotia Film Development Corporation or such other Provincial lending authorities as may be determined by the Board.
(3) Financial assistance from the Nova Scotia Fund shall not be provided by the Corporation for any business activity involving
(a) the supply of residential or rental accommodations;
(b) the supply of business premises to non-related persons;
(c) the lending of money or other activities of a finance company, loan company or trust company;
(d) the provision of insurance within the meaning of the Insurance Act;
(e) the trading in or development of real estate for purposes other than as set out in the Act and these regulations;
(f) construction by a person engaged in the construction industry; or
(g) the sale of products at retail or wholesale except where the loan amount is less than $50 000,
or any other business activity excluded by the Board or by the Minister.
(4) An applicant shall not be eligible for financial assistance from the Nova Scotia Fund, unless in the opinion of the Board
(a) the applicant has fulfilled credit assessment requirements to justify economic viability, including an assessment of the competence of management, probable market demand and competition, earning prospects, the owners’ equity, the security available with respect to any loan or loan guarantee and any potential environmental impacts;
(b) the applicant has obtained all approvals, permits or licenses that may be required from any regulatory agency that has lawful authority to regulate the activities of the business;
(c) the applicant has or proposes to have a minimum equity investment in the business of at least 20% in a manner and form determined by the Board, unless in the circumstances of the particular case, the Board determines otherwise;
(d) the provision of financial assistance to the applicant represents a net economic benefit to the Province and will be in the best interests of the Province and of the community in which the business is or is to be located;
(e) the provision of financial assistance to the applicant will not unfairly impact on any other business already operating within the Province; and
(f) there is no acceptable competitive alternative by which a loan or loan guarantee could be obtained by the applicant from another source on reasonable terms and conditions.
Decisions of the Board respecting financial assistance
8 (1) When the Board approves an application for financial assistance, it shall, subject to any requirement for consent under Section 9, decide such matters relating to the financial assistance as the Board may consider appropriate, including, where applicable,
(a) the amount, interest rate and terms and conditions of the financial assistance;
(b) the security to be provided and the fees to be paid by the applicant receiving financial assistance;
(c) the covenants to be entered into by the applicant receiving financial assistance;
(d) the terms of repayment of any financial assistance, after appropriate consideration being given by the Board to the economic life of any asset being financed by the financial assistance;
(e) the form and content of any documents to be signed or provided by the applicant; and
(f) if the assistance is from strategic investment funds, whether the applicant has met the policies and guidelines of the program adopted by the Board.
(2) When the Corporation has extended financial assistance to an applicant, the Board, subject to any requirement for consent under Section 9, may in its discretion extend, defer, adjust or compromise the repayment of any such financial assistance and may amend, vary or alter the terms and conditions of any financial assistance.
(3) The power to amend, vary or alter the terms and conditions of any financial assistance includes the power to agree to the release or partial release of any security held by the Corporation.
Where further consent of Minister or Governor in Council is required
9 (1) The consent of the Minister and Governor in Council is required for any decision of the Board approving any one provision of financial assistance from the Nova Scotia Fund where the total amount owed by the applicant on account of the financial assistance and any other financial assistance from the Nova Scotia Fund owed by the applicant and by any affiliate of the applicant will be in excess of $3 000 000 and any amendment, variation or alteration of any terms and conditions governing any such financial assistance.
(2) The consent of the Minister is required for any decision of the Board approving financial assistance from the Nova Scotia Fund by way of working capital loans or equity investments and any amendment, variation or alternation of any terms and conditions governing any such financial assistance.
(3) The consent of the Minister is required for any decision of the Board approving any provision of financial assistance from the strategic investment funds and any amendment, variation or alteration of any terms and conditions governing any such financial assistance.
(4) The Minister, prior to consenting to any decision of the Board pursuant to subsection 9(3), shall consult with the Minister of Finance as outlined in the policies and procedures referred to in clause 4(c).
Power of Corporation on default
10 Upon default in the obligations owed to the Corporation by any person receiving financial assistance or otherwise obligated to the Corporation, the Corporation may take steps to enforce the performance of the obligations and to realize on any security held by the Corporation in accordance with policies and procedures adopted by the Board.
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